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Wellington, August 21, 2020
Eligible businesses can apply for a two-week wage subsidy of up to $1,171.60 per worker from today to help cover wages as part of the Government’s plan to protect jobs and support the economy.
Applications for the new wage subsidy are now open on the website of the Ministry of Social Development.
Finance Minister Grant Robertson and Social Development Minister Carmel Sepuloni said that the new Scheme and the current Wage Subsidy Extension, which is open for new applications until September 1, 2020, will support an estimated 930,000 jobs.
Responding to global impact
“The Government has stood beside businesses and workers as we respond to the impacts of the global Covid-19 pandemic. The Wage Subsidy has protected more than 1.7 million jobs and we know it works. That is why we moved quickly to introduce the New Wage Subsidy to support businesses for the two weeks Auckland is at Alert Level 3,” Mr Robertson said.
To be eligible, a business must have experienced, or is projected to experience, a 40% revenue drop across a 14-day period between August 12 and September 10, 2020 when compared to a similar period last year.
Mr Robertson said that the Wage Subsidy is available nationwide.
“This recognises the size of Auckland’s economy and the connections between Auckland businesses and others around the country. It also recognises the impact the current restrictions are having on hospitality and tourism businesses around the country,” he said.
Ms Sepuloni said that her Ministry has advised that payments will be made withing five days from the date of application in most cases.
Improved cashflow
“Throughout our response to Covid-19, MSD has worked hard to make sure businesses and workers receive support in timely way to support confidence and cashflow. We know from a survey of businesses that received the wage subsidy that 94% said it had a positive impact on cashflow, while 62% said it helped them also manage non-wage costs like rent,” she said.
The new wage subsidy, and the expected increase in applications for the Wage Subsidy Extension, will be funded by an underspend on the Wage Subsidy Extension.
This means the Government does not need to access the $14 billion remaining in the Covid-19 Response and Recovery Fund for the payments.
Other eligibility criteria
Other eligibility criteria are the same as for the Wage Subsidy Extension. All existing employment law continues to apply. Further information can be found here:
https://www.workandincome.govt.nz/covid-19/resurgence-wage-subsidy/index.html
The Wage Subsidy and Wage Subsidy Extension have so far paid $13.2 billion to businesses to protect more than 1.7 million jobs.
Leave Support Scheme
Ms Sepuloni said that the government’s changes to the Covid Leave Support Scheme also come into effect from today (August 21, 2020).
“We have simplified the Leave Support Scheme by removing the revenue and ‘negatively impacted’ tests as part of our work to reduce barriers to people getting tested for Covid-19, including fears that a positive result would put their employment at risk or that they wouldn’t receive income while they couldn’t work because they had used up their sick leave,” she said.
To be eligible for the Leave Support Scheme, employers must meet eligibility criteria and have employees who cannot work because they have either tested positive for Covid-19, have had contact with someone who has Covid-19, or are at higher risk (or someone in their household is at higher risk) if they get COVID-19 and have been recommended to remain at home.
For further details and to apply visit:
https://www.workandincome.govt.nz/covid-19/leave-support-scheme/index.html
Examples of support
New Wage Subsidy
Under the two-week payment:
a business with 10 workers will receive a payment of more than $11,000
a business with 25 workers will receive a payment of more than $29,000
a business with 40 workers will receive a payment of more than $46,000
